But basic social security is not an insurance plan, since everyone who has worked the required number of quarters and attained the right age is eligible for benefits.

Dasher on September 12, 2011 at 12:38 PM

Perhaps the current functioning of it is not ALL like one, and in SSD you are right that it does function that way.
But please note my response above to PackerBronco.
SS was originally used as an alternative to life insurance in some ways.

The basic problem is that Social Security is an insurance policy that has been sold as an investment plan. So if you change the pardigm, it all works. Like an insurance policy, you only get your retirement money if you need it, otherwise you don’t.

PackerBronco on September 12, 2011 at 12:22 PM

I see at least one person has refuted the insurance claim.
But I agree with you.
From my historical reading regarding the FDR regime & the set up of SS, it most certainly was modeled after insurance.
I believe it was in Jim Powell’s book, FDR’s folly, that he discusses this.
Note in 1940, the Temporary National Economic Committee (TNEC)in a report of theirs recommended that the Securities & Exchange Commission investigate life insurance companies. The report was entitled : A Study of Legal Reserve Life Insurance Companies. It was feared Congress was going to use this notion of Social Security as a way to take over life insurance companies.
So to the poster who refutes this, the premise for SS as a life insurance policy masquerading as a retirement scheme most certainly does hold water.

Investing in Enron was a choice, though most certainly under false pretenses in most cases.

A working person must pay their SS tax, as well as their employer. There is no opting out.

Enron falsified their income statements, the government spent SS money which should have been held in trust, replacing them with worthless IOUs.

The principals of Enron were prosecuted, the politicians are free to lie, pay their political patronage with our money, and demagogue their way to re-election.

The mostly retarded politicians are defending their crimes and FDR’s legacy by saying SS is not “technically” a Ponzi scheme because it isn’t illegal. It is not illegal because politicians made a law to legitimize the theft of our money. If it was done in the private sector, there would be people in prison.

Long live the king.

Teachers entering the teaching profession are assured they will have a retirement benefit when they retire, requardless of what happens to Social Security.

Franklyn on September 12, 2011 at 8:40 PM

Rubes!

Social Security doesn’t have to attract investors with the soundness of its returns; the government mandates that every single worker invest in the program.

I’m incentivized to become older even faster!

I still have the question out there: If it is a Ponzi scheme, why would he want to “fix” it? That’s not the usual way Ponzi schemes are treated when they’re exposed.

whatcat on September 12, 2011 at 2:24 PM

May this may help answer that question.

Perry has the unique experience of working with a retirement system that is the twin of Social Security. It is working. Baby Boomers not a problem. Future benefit assured. Paid benefits considerably more that those current paid by Social Security.

When Congress created the Social Security system they allowed academia to create their own system as long as it provided the same benefit.

Teachers in Texas obviously understood politicans well enough to know that they would not be able to resist the temptation of all that money, and elected to opt out of Social Security.

The teachers created a retirement system that was the twin to Social Security, with one key difference. An admendment was added to the State Constitution that insured its funds were not borrowed or used. That also means that it was not saddled with other social programs like SSI or SS disablity and other social welfare drains. nor can someone that has not paid into the retirement fund, receive any benefits.

Teachers still pay all the other payroll taxes but the retirement/social security is paid to the Teacher Retirement.

The Texas Teacher retirement funds are invested and act much like an annuity where the more you pay in the more you get back when you retire. This is the teacher’s own money that they are getting back. I assume that Bush had something like this in mind and was derailed in short order. Maybe Perry does as well.
The stickler is cutting the unmentionalble welfare entitlements that the SS funds were borrowed to support and continue to do so.

I guess you don’t take taxes away from Congress without punishment. Texas teachers have no right to any Social Security benifits, even disablity that their retirement system does not have, even though an illegal can get full benefits and disability as soon as they get here. If the teacher works a second job or has or is self employeed and pays the social security tax they are still denied any benefits of Social Security, unless they give up their Texas retirement benefit. In otherwords the SS taxes teacher pay in are confiscated. SS still sends them an annual report listing how much the government confiscated.

The are some other differences as a result of keeping the politicians and everyone else out of the retirement cookie jar.

The results are a larger living benefit than SS retirees recieve.

There is the option of having the benefit continue to a spouse if the retiree dies.

There is a ten thousand dollar death benefit paid to the beneficiary. This does not stop benefits to a surving spouse.

Teachers entering the teaching profession are assured they will have a retirement benefit when they retire, requardless of what happens to Social Security.

Andrew C. McCarthy pegs it: Mitt Romney’s demagoguing of Rick Perry for calling Social Security a Ponzi scheme is just mind-boggling. Let’s put aside for a moment Stanley’s invaluable column on the home-page today, demonstrating that, for nearly half a…

sheryl on September 12, 2011 at 6:51 PM

Hot Air is a Conservative blog. Mitt Romney is not a Conservative.

Understand?

Daemonocracy on September 12, 2011 at 6:37 PM

It’s calling out hypocrisy.

Now what?

Gonna be silly here and assume that it either needs to be fixed or stopped because Ponzi schemes are bad and SS is going down the toilet.

How? Where’s the plan?

sheryl on September 12, 2011 at 6:05 PM

Or maybe Bush should have called it a Ponzi scheme and directly challenge the legitimacy of the system.

Why doesn’t Hot Air just get off the pot and endorse Perry that way your lack of objective writing will be above board.

sheryl on September 12, 2011 at 6:05 PM

All you do is whine.

Isn’t that what we always want from the MSM liberal media is to confess their bias.

sheryl on September 12, 2011 at 6:05 PM

Absolutely true. It kind of makes you wonder where some of these folks have been for the last few years.

Is Social Security a Ponzi scheme?

72.88% say no.

Interesting.

I’m sure Romney’s & Bachmann’s internal polling is telling them the same thing.

I like Obama’s bold talk and specific plan to deal with the Social Security problem.

Oh wait….he doesn’t have a plan.

johnboy on September 12, 2011 at 5:32 PM

Oh wait…neither does Perry.
Maybe that’s why Jindel will be there….to talk him through it.

For too long, politicians have been afraid to speak honestly about entitlement reform

Tina define “too long”.

George Bush spoke honestly about entitlement reforms in 2005 and he had both houses.

Maybe it didn’t register with you because he didn’t call it a ponzi scheme.

Perry is not brave throwing out red meat to a red meat audience.

Why doesn’t Hot Air just get off the pot and endorse Perry that way your lack of objective writing will be above board.

Isn’t that what we always want from the MSM liberal media is to confess their bias.

It doesn’t matter. Perry haters concerned uncommitted voters are grasping at straws. This is just another

cozmo on September 12, 2011 at 1:09 PM

That is all it is. It went on all last night on another thread. A waste of time in even responding.

bluefox on September 12, 2011 at 5:32 PM

Well then don’t…but as far as I am concerned Perry walked back his comments because he knew he went too far..and of course his supporters will more than happy to let him to do that.

The thing is that George W. Bush started talking about social security reform back in 2005. Candidates like Bachmann and Romney and Cain have already talked about the need for reform in the program..Perry has not come up with anything new and different and daring.

He just used a little demagoguery to get some attention for himself and then when it got tough for him..he backed off.

Now we are hearing that we need to fix the program…not abandon it or turn it over to the states.

Sound and fury signifying nothing.

Oh wait….he doesn’t have a plan.

cozmo on September 12, 2011 at 1:09 PM

That is all it is. It went on all last night on another thread. A waste of time in even responding.

Good info and layout of the issues. I agree that the R’s need to stop playing into the opposition’s hand. I see Presidency before Party and before Country in what is going on.

Perry’s Ponzi scheme is to social security as Palin’s death panels was to Øbamacare. It sets the terms of debate.

Perry’s rhetoric is also enormously helpful because it’s generating this conversation, just as he hoped.
Hopefully Palin will be a Perry campaign consultant.

petefrt on September 12, 2011 at 12:48 PM

I heard that segment today and was writing down all of the article references and there were so many, LOL

This you said: Perry’s Ponzi scheme is to social security as Palin’s death panels was to Øbamacare. It sets the terms of debate.

Very smart point, exactly.